Taipei,Oct.17,2012(CENS)--After the absence of new issuance for two years,a new product will hit the global-board bond market,as BNP Paribas will float 200 million Australian dollars of corporate bond,with interest rate topping 4%.Since the pricing was fixed before interest-rate cut by the Australian central bank,the underwriting bank has decided to take over the bond itself and earn stable interest spread.
BNP Paribas floated 190 million Australian dollars of bond in Taiwan three years ago,which will mature in early November.In order to diversify funding sources and support Taiwanese government's effort for developing global-board bond market,the bank decided to float bond at the scale of 200 million Australian dollars in Taiwan.
The global-board bond market was launched by the former DPP(Democratic Progressive Party)government but became stagnant after issuances of six bonds,due to high cost for bond issuance following the outbreak of the European-debt crisis,which raised the premiums for the credit of financial institutions in Europe and the U.S.
Meanwhile,the low interest-rate environment dampened trading of the bonds on the secondary market,prompting most investors to keep their bond holdings until maturity.Therefore,since July 2010,there has been no issuance of new global-board bonds in Taiwan for two years.
The Australian dollar-denominated bond issued by BNP Paribas boasts issuing interest rate of 4.3%,1.7 percentage points higher than existing interest rate for one-year Australian-dollar time deposit.
Mega Bank is the lead underwriter for the Australian-dollar bond,responsible for selling 160 million Australian dollars of the bond;other assistant underwriters include Bank of Taiwan,Chang Hwa Bank,and Shanghai Commercial and Savings Bank,which will be responsible for sales of 20 million Australian dollars,10 million Australian dollars,and 10 million Australian dollars,respectively.Mega Bank has decided to keep great majority of the position itself,to benefit from the high interest spread.
